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Offshore Company Formation and the Legal Standpoint

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Offshore Company Formation and the Legal Standpoint

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While political upheavals may have given a bad rep to its functional outlook, offshore company formation is actually a great means of a legal tool to conceal, protect or transfer assets/property/funds through secure laws that are duly authorized by the host country’s legislature.

The idea behind an offshore company formation is to register a corporate entity that benefits from the laws that are illegal, weak, or absent in the investor’s country of origin.

Under most cases, offshore companies are formed to serve as tax avoidance mechanisms, managing risks, maintaining business privacy, and privileging from local banking. Such companies enjoy little or no financial liability, operational secrecy, foreign currency exchange freedom, and remote management.

Why Secrecy is Justified?

The reason many offshore business providers keep the legal details such as company trade name, employee and shareholder identities, and financial records a secret is to prevent business rivals and oppressive regimes leverage from such information. In fact, investors, property owners, and businessmen are often victimized in their country by biased court judgments, criminal syndicates, and fraudulent pursuits.

Here are 3 reasons why businesses prefer offshore companies as open legal fronts aside from their mainstream benefits.

1. To Fulfill Legal Requirements

Setting up an offshore company sometimes comes as a legal requirement when investing in a business or purchasing property in a foreign country. Many countries with specialized investment zones require an offshore company as a subsidiary to invest its money than the investor’s own money from his/her investment channel. To make sure the process is transparent, investors set up their private offshore companies and then use it for their business ventures.

2. Better Legal Framework

Aside from the known benefits and advantages of offshore company setup, one of the underlying reasons investors choose offshore business structures is because it offers a better legal framework.

An investor who live in countries where the political and socioeconomic situation is volatile often seek more stable landscapes even if it involves paying a little extra. Since Dubai houses one of the world’s finest free zones, it makes an ideal destination for setting up an offshore company to headquarter the company’s operations. Along with the benefits mentioned earlier, the investor also gains access to international markets, better facilities, superior infrastructure, and prejudice-free courts.

3. Remote Incorporation and Operations

Investors come in all shapes and sizes. While most follow certain jurisdictions for their specific activities, other prefer traveling from one country onto the next in search for better opportunities to invest and expand their territories. Such type of investors needs a reliable, convenient and safe place to run their operations as they go along. As an offshore company in UAE, the investor doesn’t have to be physically present to incorporate it or adhere to any other form of laws that requires the investor to remain in the country to run operations.

How IBG Can Help?

IBG Consulting is UAE’s premier business consultancy and setup agency, catering to a broad range of business formation solutions for all types of investors. We understand every business requires a unique approach to help it nurture and grow in UAE’s diverse landscape. As we provide you top-tier services in offshore company formation, we walk you through a detailed introduction of offshore company setup, its legalities, options, and incorporation process, so you remain aware of every stage while we do all the work. Contact us now to get in touch with our consultants or speak to our expert.


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